Novavax Inks Deal With India For 2B Covid-19 Vaccine Doses In 2021

Novavax has inked an additional agreement with the Serum Institute of India Private Limited (SIIPL) to ramp up the manufacturing capacity of its Covid‑19 vaccine candidate, NVX-CoV2373, to over 2 billion doses annually as of 2021.

Novavax (NVAX) shares closed 4.3% higher at $110.34 on Tuesday. As part of the agreement SIIPL, the world’s largest vaccine developer, will manufacture the antigen component of NVX‑CoV2373 and has committed to deliver 1 billion doses of the vaccine candidate in 2021.

NVX‑CoV2373 is a stable, prefusion protein made using Novavax’ recombinant protein nanoparticle technology and includes the company’s proprietary Matrix‑M adjuvant.

“With this arrangement, we have now put in place a global supply chain that includes the recently acquired Praha Vaccines and partnerships with leading biologics manufacturers, enabling production on three continents,” said Novavax CEO Stanley C. Erck. “We continue to work with extraordinary urgency to develop our vaccine, now in Phase 2 clinical trials, and for which we anticipate starting Phase 3 efficacy trials around the world in the coming weeks.”

Earlier this month, Novavax disclosed additional data from the Phase 1/2 clinical trial of NVX‑CoV2373 that showed more support that the Covid-19 vaccine candidate was well-tolerated and induced “robust” antibody responses. The biotech company said it is on track to initiate late-stage trials in the third quarter.

Novavax’s vaccine candidate has been selected to be part of Operation Warp Speed (OWS), a US government program that seeks to begin supplying millions of doses of a safe, effective vaccine for COVID-19 in 2021. As part of the program, the company has been awarded with $1.6 billion in funding for testing and manufacturing as well as the supply of 100 million doses of the potential vaccine to the US.

In the run-up to developing a coronavirus vaccine candidate, the stock has this year exploded 2,672%. However, NVAX has seen some sell-off activity recently, as the stock dropped 29% over the past month. (See Novavax stock analysis on TipRanks).

Following the agreement, B.Riley FBR analyst Mayank Mamtani reiterated a Buy rating on the stock with a $257 price target (133% upside potential).

“Beyond the manufacturing capacity expansion, we believe this also serves as incremental validation to ‘2373’s best-in-class potential to have significant resources committed “at-risk” by SIIPL, the world’s largest vaccine manufacturer by a number of doses, i.e., 1.5 billion+ doses provided globally across polio, diphtheria, tetanus, pertussis, hib, BCG, rHepatitis B, measles, mumps, and rubella vaccines,” Mamtani wrote in a note to investors.

The rest of the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus shows 4 Buy ratings versus 1 Sell rating. Meanwhile, the $227.60 average analyst price target indicates a promising 106% upside potential from current levels.